An Empirical Analysis On The Effect Of Foreign Direct Investment On Hebei's Economic Growth

As the main pattern of international capital inflows, FDI is now playing a more andmore important role in the world economy for host countries, especially for developingcountries. With the development of the FDI in Hebei province since 1985,the FDI hasplayed an important role in the economy and social development of Hebei province .Manysuccessful experience in the process of utilizing foreign capital ,there are many problems inreality such as unreasonable regional investment, single investment means , centralized sourceof foreign capital. What is the relationship between FDI and economic growth has beenfocused on by domestic and international scholars. On the base of former research ,this thesisanalyzes both the relationship between FDI and economic growth and the contribution offoreign and domestic investment to economic growth. Through the study of the importedforeign capital of Hebei province since 1985. First, there is a long-term stable relationshipbetween FDI and economic growth according to the co-integration analysis , and it is foundthat Granger Causality exists through Granger-causality test. Secondly, it is concluded that theper FDI makes greater contributions than per domestic capital to economic growth throughconstruction of the model of C-D production function. At last, some suggestions on how toutilizing foreign capital are given on the above basis.